On April 3, 2009, the National Environmental Development Association (NEDA) filed a petition for rehearing en banc on a controversial decision (Sierra Club v. EPA) by the D.C. Circuit Court of Appeals. In that case, decided December 19, 2008, the court vacated the Startup, Shutdown, Malfunction (SSM) rules contained within the NESHAP General Provisions, 40 C.F.R. Part 63, Subpart A. The exemption has been in place since the EPA adopted the General Provisions to 40 C.F.R. Part 63 in 1994 pursuant to Section 112 of the federal Clean Air Act. Until this decision, sources were exempted from MACT technology-based emission limits if all elements of the SSM exemption were satisfied. Sources were nevertheless required by the general duty clause to minimize emissions to the greatest extent possible. The appeal stems from proposed rulemakings by the EPA in 2002, 2003 and 2006 to revise the SSM requirements.

In its petition, NEDA argued that the panel’s jurisdictional ruling could not be reconciled with the court’s precedents concerning the constructive reopening doctrine. The majority panel in Sierra Club v. EPA vacated the rule entirely despite the fact that the statutory time period to appeal the initial rule promulgated in 1994 had long passed. According to the petition for rehearing, that doctrine has been traditionally limited to cases involving “regulated entities” (Petition for Rehearing, p. 8). NEDA also emphasized the dissenting judge’s conclusion that the EPA rules on appeal “did not alter the [SSM] exemption” in any way. (Id., p. 10). The dissenting judge also noted the potentially troubling precedent that the majority’s decision would have if “each time [an agency] changes [a] regulation, it risks subjecting every related regulation to challenge.” (Id., p. 11).

NEDA also argued that the decision would have ‘draconian consequences’ on the nation’s manufacturing industries if the decision were not reversed. NEDA’s petition states that “because most MACT standards are based on normal operations, sources may not be able to comply with such standards during SSM events.” (Id., p. 12). In addition, compliance with MACT standards during startup and shutdown may not be possible for certain types of pollution control equipment.

If the decision is upheld, it may call all existing MACT rules into question. Because all of the MACT rules were premised upon the existence of the SSM exemption, the revocation of the exemption could allow regulated entities to challenge the underlying MACT rules (ironically, under the constructive reopening doctrine) as being too stringent without the consideration of data from SSM periods for development of the MACT floor. MACT standards would then need to be evaluated on a source category by source category basis for SSM events. The case will have significant impacts if the initial decision by the three-judge panel is allowed to stand.

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